3 Dividend Stocks Every Canadian Should Own

Every Canadian should own these three dividend stocks, no matter what their risk profile is, to ensure long-term income and growth.

Key Points
  • Dividend investing delivers steady income and compounding growth—dividends can cushion returns while you wait for capital appreciation.
  • Top TSX picks: Fortis (FTS) — regulated utility with ~3.34% yield and 50+ years of dividend growth; Royal Bank of Canada (RY) — Canada’s largest bank, ~2.64% yield and a long payout history; Canadian Natural Resources (CNQ) — major energy producer with ~3.99% yield and strong recent performance.
  • Foolish takeaway: hold dividend stocks (especially in a TFSA) for tax‑free compounding, but diversify and ensure holdings match your risk and income needs.

There is never a one-size-fits-all solution to the best strategy for investing in the stock market. However, I think all seasoned veterans in the game will agree that dividend investing is crucial to success as a stock market investor. Dividend stocks can be a great part of any investment strategy due to the extra returns investors can get through quarterly or monthly dividends.

While you wait for capital gains to provide meaningful wealth growth in the long run, the dividends you earn on the way can line your account balance with extra cash. If you reinvest those dividends to buy more shares, you can accelerate your wealth growth through the power of compounding.

Against this backdrop, I will discuss three TSX dividend stocks that make sense for any stock market investor’s portfolio.

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Fortis

Fortis (TSX: FTS) is a staple holding for Canadian stock market investors. Described as a boring utility stock, Fortis does not offer much in terms of short-term capital gains. However, it is not its share price appreciation that makes it a mainstay for investors. Fortis is a dividend-paying stock that has increased payouts each year for over the last half-century.

The $39.01 billion market-cap utility holdings company owns and operates several natural gas and electricity utility businesses across Canada, the U.S., and the Caribbean. With most of its revenue coming from long-term contracted assets in regulated markets, it generates virtually guaranteed and predictable revenue.

Backed by a solid business model, it is unsurprising for the stock to boast one of the longest dividend-growth streaks on the TSX. As of this writing, it trades for $76.62 per share and boasts a 3.34% dividend yield.

Royal Bank of Canada

Royal Bank of Canada (TSX: RY) is another stock often found in investment portfolios, and its dividend streak is a good reason for that. While it does not boast a lengthy streak of dividend growth, it has been paying its investors their dividends since 1870. Having paid investors quarterly dividends for almost 160 years, RY stock has also increased payouts for the last 10 years.

Royal Bank of Canada stock has seen its dividend yield become deflated as its share prices have increased over the years. As of this writing, it trades for $247.72 per share and pays investors $1.64 per share each quarter, translating to a 2.64% dividend yield. While the dividend yield might not seem that high, it is its reliable track record that makes RY stock a compelling investment to consider.

Canadian Natural Resources

Canadian Natural Resources (TSX: CNQ) is one of the largest producers of traditional energy products in Canada. The $129.87 billion market-cap TSX oil and natural gas production company that boasts an excellent track record of paying dividends to its investors. CNQ stock can also be a good play to consider amid rising energy prices due to the conflict in the Middle East.

After its most recent hike in dividends, CNQ stock pays its investors $0.625 per share each quarter, translating to a 3.99% dividend yield that you can lock into your portfolio today. As of this writing, it trades for $62.26 per share, up by over 60% in the last 12 months. Considering that, its 3.99% dividend yield is too attractive to ignore.

Foolish takeaway

Dividend investing can be one of the best ways to put your money to work in the stock market. A self-directed portfolio of dividend stocks held in a Tax-Free Savings Account can help you keep even more of your returns through its tax-sheltered status. This way, you can accelerate your long-term wealth growth even further and set yourself up for a more comfortable retirement or achieve other financial goals.

To this end, Fortis stock, RBC stock, and CNRL stock could be excellent investments to consider for your portfolio.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources and Fortis. The Motley Fool has a disclosure policy.

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